Sheppard Law Blog

The federal government is taking action today with respect to two COVID-19 relief packages. First, the previously announced CERB eligibility extensions have officially come into force. Second, the government introduced legislation for the Canada Emergency Student Benefit. CERB Eligibility Extensions The government issued two Interim Orders ( Interim Order No. 2 and Interim Order No. 3 ) today that amend the Employment Insurance Act Emergency Response Benefit provisions to extend CERB eligibility to individuals earning less than $1,000 per month and individuals whose EI regular or most other benefits have or will run out. The Orders also clarify that individuals who otherwise could have qualified for regular or most other benefits had they not applied for the CERB are subject to the same eligibility thresholds. All of these extensions come into force as of March 15, 2020, meaning that individuals who are now eligible can apply for benefits retroactive to March 15, 2020. Today...

The Canada Emergency Wage Subsidy (CEWS) application is now available online for employers. In his daily press conference today, Prime Minister Trudeau announced that subsidy funds will likely be provided to eligible employers by May 7, 2020 at the earliest. For more information about the CEWS, including eligibility and which subsidies your business may qualify for, please see our wage subsidy comparison . Don't forget to also visit the wage subsidy calculator to see how much your business might receive under the CEWS and register for direct deposits if you have not done so already. Note: while this blog and the information above provides general information, it does not constitute legal advice. The best way to get guidance on your specific legal issue is to contact a lawyer. For more information about the CEWS, or if you have any other questions regarding your employment issue, please contact our office for a consultation with one of our lawyers .

The Prime Minister and Finance Minister Bill Morneau provided more details today about the Canada Emergency Commercial Rent Assistance (CECRA) agreement they have reached with the provinces and territories. The program, which will be available in mid-May, will provide commercial tenants with a 75% rent reduction in the months of April, May, and June 2020. How It Will Work Landlords must enter into an agreement with the Canada Mortgage and Housing Corporation (CMHC) for a forgivable loan covering 50% of commercial rents for each eligible tenant. The landlord must agree to a moratorium on evictions and reduce the tenant's rent by 75%. For the tenant to qualify, its rent must be less than $50,000 per month, and they must, per the Prime Minister's press release , "have temporarily ceased operations or have experienced at least a 70 per cent drop in pre-COVID-19 revenues". As with the initial announcement of the CEWS wage subsidy, there is no precise information a...

Commencing Monday, April 27, 2020 , businesses can apply for the Canada Emergency Wage Subsidy through their CRA My Business Account Portal . The CRA has also launched a wage subsidy calculator so that businesses can quickly see how much they can expect to receive from the subsidy. For more information about this subsidy, be sure to visit the government's CEWS information page and our recent blog post about eligibility for this subsidy . Minister Duclos stated advised that the federal government expects 90% of applications will be processed by May 5. Businesses can expect cheques and direct deposits shortly thereafter, and are encouraged to update their CRA business account profile. Note: while this blog and the information above provides general information, it does not constitute legal advice. The best way to get guidance on your specific legal issue is to contact a lawyer. For more information about the CEWS, or if you have any other questions regarding your empl...

Prime Minister Trudeau provided an update on the economic measures the federal government plans to take to buttress the measures already in place, including the CERB and CEWS. Arts, Culture, and Sports The government will be providing $500 million to Heritage Canada to support individuals and organizations experiencing economic hardship due to COVID-19. These funds will be used to provide athletes, artists, and others in the arts/culture/sport sector with wage support. Organizations experiencing cash-flow issues will also be able to receive support. For a list of the programs offered through Heritage Canada, click here . Small Businesses Prime Minister Trudeau announced that the government would be providing $962 million to the country's regional development agencies and the Community Futures Network of Canada to support these organizations. Although specifics were not provided, the Prime Minister stated that these funds will be used at least in part to help rural busi...

The federal government's second COVID-19 economic relief package received Royal Assent on April 11, 2020. The bulk of the new legislation amends the Income Tax Act to create what has become known as the Canada Emergency Wage Subsidy (CEWS). The CEWS adopts or varies many of the changes announced on April 8 . This post summarizes the newly enacted CEWS eligibility requirements, the subsidy amount, how to apply, and concludes with a comparison of the CEWS and the Temporary Wage Subsidy (TWS) . 1. Eligibility There are several requirements for a business to be eligible for the wage subsidy. a. Employees As the total subsidy amount a business can receive depends on the number of employees, each individual employee for whom the employer seeks to receive the subsidy must meet certain eligibility criteria. Each employee who receives the benefit must, for each qualifying period, be employed in Canada by a business that is eligible to receive the subsidy. The employee cannot be...

In today's daily 11:15 a.m. press conference, Prime Minister Trudeau announced some changes to the proposed 75% wage subsidy. Eligibility: Businesses will now have the option to use January and February 2020, rather than the same month the previous year, as the comparative months for demonstrating the required 30% loss of revenue to qualify. Businesses will now also only have to show a 15% decline in revenues for the month of March 2020 only to receive the subsidy. The requirement to show a 30% decline in revenues will remain in order to receive the subsidy in subsequent months. Charities and Not-for-Profit Organizations: These organizations will have the option of deciding whether or not to include government funding when calculating revenue losses for the purposes of qualifying for the subsidy. Timeline to Implementation: The government hopes to accelerate the timeline for administering the subsidy. Previously, the expected timeline for businesses to receive the subsidy wa...

Prime Minister Justin Trudeau announced today that the government is looking into how to help individuals who do not currently qualify for the CERB. For instance, individuals who are currently working but receiving less than the $2,000 benefit amount are ineligible for the CERB because they do not meet the eligibility requirement that they have been out of work for 14 consecutive days. Individuals who are able to work but have seen a drop in their income due to COVID-19 are also ineligible for the same reason. For instance, a private self-employed music teacher who continues to teach remotely but experiences a drop in enrolment is currently ineligible because he or she remains working. The Prime Minister's announcement also alluded to how the government might remedy this situation. During the question period, Mr. Trudeau suggested that the government might extend the CERB to individuals who, for instance, meet a threshold number of reduced working hours due to COVID-19, or who ar...

On March 25, 2020, the federal government amended the Income Tax Act to provide eligible businesses with the ability to deduct up to 10% of employee wages from their source deductions. This measure was included in the COVID-19 Emergency Response Act , which is currently in full force and effect. How the Subsidy Works Eligible employers are able to deduct 10% of the remuneration the business pays its employees from March 18, 2020 to June 19, 2020 up to $1,375 for each eligible employee, and to a maximum of $25,000 per employer. The employer is responsible for calculating the deduction itself, and simply remits less of its employees' federal or provincial income tax from source deductions. The CRA has provided many examples of how to calculate the subsidy amount. The total subsidy amount can only be deducted from federal or provincial/territorial tax source deductions. Employers must still remit the full amount of their employees' CPP and EI source deductions, as well as ...